Building-permit applications for commercial property projects have fallen for a second year in a row in 2012, according to new research by law firm EMW Law LLP.
The report highlighted that the number of applications had fallen by 3.5 per cent last year to 38,600, whilst permits for retail, warehouse or office projects that covered at least 1,000 sq m had also fallen by nine per cent to 2,100. In total, this means that the number of applications have fallen by a mammoth 23 per cent since the global financial crisis hit in 2008.
This news comes after various initiatives have been implemented by the UK government to boost property development and construction within the sector. This has been reflected with property development finance remaining unchanged in the first quarter of the year for commercial property. The Bank of England forecasted in April that these levels should stay the same until at least the end of June.
Even though permit applications have been dwindling, London activity has been buzzing. The latest London Office Crane Survey by Deloitte Real Estate has highlighted that 9.7 million sq ft of commercial property space is being built in London right now. Not only is this an eight per cent rise from six months ago, but it also marks a four-year high. This means that construction in the capital city has more than tripled since the middle of 2010.
For income-producing sites, it has been a mixed picture, with values having risen by 7.4 per cent in the centre of London, whilst areas outside of the capital city saw values decline by 7.2 per cent since September 2011, according to the Investment Property Databank.
Analysts will be keeping an eagle eye on the sector when the official second quarterly figures are released later this year.